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Expert Analysis

The Treasury's Harder Look At Developer Fees

Law360, New York (October 15, 2012, 3:46 PM EDT) -- The term "developer fee" is often misused. The classic developer fee is a success fee that a project company pays a separate development company as a reward for pushing the project across the finish line. The U.S. Department of the Treasury is generally limiting such fees paid to affiliated development companies to 3 to 5 percent of the project cost. Exceptions are where a development services agreement was in place before 2009 or development took an unusually long time and the developer had a lot of capital at risk....

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